Correlation Between American Balanced and Supercom
Can any of the company-specific risk be diversified away by investing in both American Balanced and Supercom at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Balanced and Supercom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Balanced and Supercom, you can compare the effects of market volatilities on American Balanced and Supercom and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American Balanced with a short position of Supercom. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Balanced and Supercom.
Diversification Opportunities for American Balanced and Supercom
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between American and Supercom is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding American Balanced and Supercom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Supercom and American Balanced is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American Balanced are associated (or correlated) with Supercom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Supercom has no effect on the direction of American Balanced i.e., American Balanced and Supercom go up and down completely randomly.
Pair Corralation between American Balanced and Supercom
Assuming the 90 days horizon American Balanced is expected to generate 20.55 times less return on investment than Supercom. But when comparing it to its historical volatility, American Balanced is 15.26 times less risky than Supercom. It trades about 0.07 of its potential returns per unit of risk. Supercom is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 370.00 in Supercom on November 3, 2024 and sell it today you would earn a total of 784.00 from holding Supercom or generate 211.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
American Balanced vs. Supercom
Performance |
| Timeline |
| American Balanced |
| Supercom |
American Balanced and Supercom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Balanced and Supercom
The main advantage of trading using opposite American Balanced and Supercom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Balanced position performs unexpectedly, Supercom can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Supercom will offset losses from the drop in Supercom's long position.| American Balanced vs. Income Fund Of | American Balanced vs. Capital Income Builder | American Balanced vs. Capital World Growth | American Balanced vs. Growth Fund Of |
| Supercom vs. Zedcor Inc | Supercom vs. SSC Security Services | Supercom vs. Blue Line Protection | Supercom vs. Guardforce AI Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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